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Good Stewardship in a Bad Economy

April 12, 2010

Seedling009 Last Thursday, the Foundation Center celebrated the publication of After the Grant: The Nonprofit's Guide to Good Stewardship, the newest title in its proposal writing book series, with an event at its New York library featuring Altman Foundation president Jane O'Connell and nonprofit consultant Marilyn Hoyt. Book editor Judi Margolin kicked off the event by talking about how the book came to life.

Over the years, the Foundation Center has published a broad range of sector-related guides and nonprofit management books, but nothing about how nonprofits can build relationships with funders after receiving a grant -- which, according to Margolin, "is just the beginning." After the Grant fills that gap with an in-depth look at what it takes to build and maintain lasting relationships with key funders.

While many of the development pros in the room had secured their fair share of grants over the years, a quick show of hands revealed that last year was a tough one for almost everyone. And, according to a recent Foundation Center research advisory and a separate survey by the Nonprofit Finance Fund, foundation giving isn't likely to rebound in 2010.

Speaking directly to that point, O'Connell said that "We may never get back to where we were" -- and that means everyone, foundations and nonprofits alike, needs to re-evaluate what they are doing and how they do it.

According to O'Connell, the economic downturn has caused many foundations that don't want "to waste a good crisis" to re-evaluate their giving. As a result, foundations are:

  • proceeding with caution and considering alternative forms of investment (including mission- and program-related);
  • looking more closely at outcomes;
  • looking more closely at who is sitting on their grantees' boards (and paying special attention to who is watching the organization's money);
  • looking more closely at their grantees' financials to see whether they have adequate reserves and/or are overly reliant on government grants;
  • not particularly enthusiastic about mergers because in many cases "they haven't panned out as we thought they would."

Bottom line: Nonprofits need to treat their funders "just like they were venture capitalists," said Hoyt. Foundations want to have good relationships with their grantees. Not only do they want to hear about the good things a grantee was able to do with their grant, they also want to hear about the things that didn't go as planned -- and, in many cases, may be willing to offer additional help, if it makes sense. "Our success is their success and our failure is their failure," said Hoyt, quoting a Wisconsin funder.

When reaching out to program officers, added Hoyt, think about the fact that they've already gone to bat for your organization. Be nice to them. Don't be a pest.

Here are some things you can do:

  • Hire a photographer to take pictures at your events. After every event, e-mail your program officer and ask whether he/she would like digital copies for their newsletter or annual report.
  • Set up Google Alerts. Each time your program officer or funder turns up in the news for a job well done, send them a brief congratulatory note.
  • Most importantly, have a conversation with your program officer and ask how often he/she would like to hear from you.

What other things can or are nonprofits doing -- both before and after the grant -- to cultivate solid, productive relationships with their funders? Use the comments section below to share your good stewardship tips.

-- Regina Mahone

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